Let’s recall what a stimulus is. Caffeine is a stimulant. Amphetamines are stimulants. They make you feel more energetic and hyper, but they’re not based on anything substantive.
Protein and healthy vitamins give you the strength and the lasting stamina to be able to maintain energy, complete tasks and perform both physical and mental functions – combined with enough rest, of course. That’s the healthy way to stay energetic. A lot of people try to augment (or replace) that approach by slamming coffee or Red Bull, but those stimulants aren’t really giving you more capacity. They’re just making you feel like you have more.
The same is true with economic stimulus in the form of cash handed out that’s completely detached from productivity or the creation of real wealth. When you make something of value and sell it to people who want it and are happy to pay for it, real wealth has been created because everyone involved with the transactions received something of value they didn’t have before.
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When the government borrows money and mails you a check, that’s the economic equivalent of slamming a Red Bull. Your situation feels better in the moment, but it hasn’t fundamentally changed. And on a macro scale, the economy seems healthier because people have cash to buy things with. But nothing new of value is being produced, so the economy isn’t fundamentally stronger.
If Congress wants to get the economy growing again, it should take down the barriers that are preventing the productive sector of the economy from producing. Instead, it sounds like we’re going to get more fiscal Red Bull:
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VIDEO: President Trump commits to 2nd stimulus. He says details would be announced in the coming weeks. The President would not tell me how much of a check Americans will receive. pic.twitter.com/Abd5E8P3Au
— Joe St. George (@JoeStGeorge) June 22, 2020
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Joe St. George is a reporter for a group of TV stations owned by Scripps, so nice job on his part landing the scoop. Not such a nice job constantly badgering the president for details he can’t possibly give, like how much the stimulus will be or when it will happen. If St. George would just think back to the last stimulus bill, he would remember all that has to be negotiated in Congress and it’s impossible to predict what the final amounts will be.
But a better question is why it makes sense to do another stimulus package at all. Yes, far too many people are still out of work. But they’re also receiving the most generous unemployment benefits in the history of this country, with the usual 60 percent of their previous income augmented by a $600-a-week federal bonus. For most people that comes out to at least as much as they were getting before the lockdown, and for many, it’s more.
Meanwhile, the businesses that are trying to continue operating and keep people on the payroll are struggling to maintain revenue because so many other businesses are shutdown at the orders of their governors or out of fear for whatever Anthony Fauci decides to say on a given day.
If you want to get the economy growing again, remove the barriers to productivity. Let people get back to work. Let companies get back to full capacity. If people need to wear masks and stand six feet apart, fine. But people need to work. The economy needs to produce.
The federal government is already running a deficit this year of well over $3 trillion, and the Democrats in Congress are complaining that we aren’t spending enough. Anyone who remembers when these same people used to scream bloody murder because Ronald Reagan was running deficits of around $200 billion a year, well, I’ll wait until you stop laughing and pick yourself up off the floor.
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During 2018 and 2019, when the economy was soaring under President Trump’s policies, the Democrat/media complex insisted it was merely a sugar high. No. It was a fundamentally sound economy fueled by a tax cut that redirected a lot of capital away from politicians and into the hands of entrepreneurs who knew how to invest it wisely and productively.
An economy based on “stimulus” funded by government borrowing? That’s a sugar high, and we’ve had enough of it. Stop the borrowing, stop the free money and let the business sector return to full strength.
The only thing a Red Bull economy is going to do is keep you up all night and bouncing off the walls. We crave substance.
